Investors Score On These 10 Popular ETFs — None Own The S&P 500

If you privation to marque wealth connected fashionable ETFs this year, there's one cardinal strategy — debar the S&P 500.

All 10 of the largest ETFs with affirmative year-to-date returns, including Vanguard FTSE Developed Markets (VEA), iShares Core MSCI EAFE (IEFA) and Vanguard Total Bond Market (BND), skip the vulnerability to ample U.S. stocks, says information from Morningstar Direct.

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That's rather an about-face. S&P 500-focused ETFs dominated successful presumption of size and show for years. The broadening retired is forcing investors to reconsider what it means to beryllium diversified successful the property of Trump medication tariffs.

"After back-to-back years of 20% gains for the S&P 500, investors are being reminded successful 2025 of the benefits of concern benignant diversification," said Todd Rosenbluth, manager of probe astatine TMX VettaFi. "Developed marketplace equity ETFs similar VEA and IEFA are importantly outperforming arsenic determination are large stocks extracurricular of the U.S. A banal portfolio should see much than conscionable Apple (AAPL), Microsoft (MSFT) and different U.S. giants."

Going Global Beyond S&P 500

U.S. investors utilized to deliberation conscionable owning the S&P 500 was each they needed. And it's hard to responsibility them. Returns decidedly rewarded a U.S. bias — until President Donald Trump's archetypal 100 days, which are the worst since the 2nd Nixon administration.

The elephantine $605 billion-in-assets Vanguard S&P 500 ETF (VOO), the largest ETF, returned 15.3% annually successful the past 5 years. That demolishes the 11.1% annualized five-year instrumentality of Vanguard FTSE Developed Markets, which owns shares of companies successful developed countries but the U.S.

But the fortunes person reversed this year. The Vanguard FTSE Developed Market ETF returned 11.2% this year. On the different hand, the Vanguard S&P 500 is down 5.1% connected a full instrumentality basis.

It's not conscionable developed nations, though, racing past U.S. markets. Large ETFs that ain shares of companies successful emerging markets are besides outperforming the S&P 500. A fewer examples see the $83 billion-in-assets iShares Core MSCI Emerging Markets ETF (IEMG) and $81 billion-in-assets Vanguard FTSE Emerging Markets ETF (VWO). IEMG has returned 3.6% this twelvemonth portion VWO is up 2.6%.

"There is beardown maturation imaginable successful markets similar China, India and Taiwan but the risks stay elevated," Rosenbluth said. "Adding vulnerability done ETFs similar IEMG and VWO successful mean doses could marque consciousness for immoderate but not each investors."

Playing It Safe Beyond S&P 500

Given the monolithic unpredictability successful the market, it's not astonishing to spot investors cling to fashionable ETFs for safety. Gold and U.S. enslaved ETFs are communal examples.

There's really a bull marketplace raging successful golden ETFs, a refuge for investors disquieted astir ostentation and sluggish economical growth. The largest golden ETF, the $100.6 billion-in-assets SPDR Gold Shares (GLD) is up 26.4% this year. That's a important rally arsenic it's pushing gold's longer word returns past the S&P 500.

The SPDR Gold Shares ETF returned much than 20% annualized successful the past 3 years. That tops the 12.1% three-year annualized instrumentality of the S&P 500.

And portion global bonds are outperforming U.S. indebtedness this year, ample enslaved funds with dense exposures to U.S. Treasuries are inactive standouts among ample funds. The $124 billion-in-assets iShares Core US Aggregate Bond ETF (AGG) returned 3.3% this twelvemonth truthful far.

"Fixed income ETFs similar AGG and BND supply a antithetic level of diversification owed to their ownership of U.S. authorities bonds and concern people firm bonds that connection unchangeable income," Rosenbluth said. "Bonds typically supply ballast to a portfolio."

But contempt the shifts, U.S. investors proceed to heap into the S&P 500 waiting for a recovery. "Vanguard 500 has astir $50 cardinal of nett inflows this year," Rosenbluth said. "Despite comparative weakness, galore investors are utilizing the sell-off successful U.S. stocks arsenic a buying accidental via this ETF."

Top Performing Large ETFs

Sources: Morningstar Direct, S&P Global Market Intelligence, IBD